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Unpaid tuition now in Collections, need some advice!

Submitted by on Sun, 03/02/2008 - 14:38
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Hi I hope someone on here can answer these questions!

I have unpaid tuition that is now being handled by a collection agency. I have learned from Soaplady's posts that
1) tuition has no SOL
2) they are not "sold" to the CA, they are just under contract
3) the fees that are added on are "collection fees" (up to 50%), not "interest".

My question is this - is the 50% "collection fees" supposed to based on the Original Amount owed for tuition (in my case about $1500), or the amount after years of interest added on (in my case, the University had added about $1400 in past due charges totalling $2900 - before it was sent to a collection agency).

Also, if the collection agency can't charge interest, why did the collection lady tell me that I need to pay this ASAP otherwise I will keep accruing interest to what is owed (and true to this fact - each month statement I get from them is about $40 more than the month before)? Does that mean the university is still adding on monthly interest & fees even while the account is with the collection agency?

Any advice would be helpful!


hi ktsweets--

Remember, as you noted, the account is not sold to the CA--they are assigned the account to collect on, on behalf of the entity that still owns the debt. So, even though it may be assigned to the CA to collect, that doesnt change the ownership of the debt, and it doesnt change anything about the interest being added. Remember when you took out the financial aid that there was interest? That interest is legally acceptable because you agreed to the interest when the loan began.

As for the 50% fee, I am only guessing here, but I would imagine that it would be up to 50% of whatever the amount owed is at the time the CA gets the account, because that is the actual amount owed. Whatever was owed before is different and has no bearing on what is placed with the CA now--what is owed now does. Like I said, just a guess, but thats probably how they work it. There is a specific section on this forum for dealing with student loans--you might find more help there. Pretty much everything about collections is different with student loans--even the laws that govern it--because student loan collections as far as I recall are not subject to the fdcpa.

MOD COMMENT...student loan collector ARE subject to the FDCPA.


Submitted by skydivr7673 on Sun, 03/02/2008 - 18:51

skydivr7673

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i am not able to pay off this tuition loan right now. I don't mind paying it, but it is stopping me from completing my degree requirements. what can I do ? if i complete my studies, i can earn more money and pay off the loan.


Submitted by on Sun, 04/19/2009 - 11:13

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Is your tuition past due already?? Tuition is due each semester, not pay after you get your tuition. Are you borrowing or have you borrowed student loans to pay for your tuition?

You will not be able to continue on if you have past due tuition. You will have a lock on your account.


Submitted by SOAPLADY on Sun, 04/19/2009 - 11:40

SOAPLADY

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Agreed, the only way to get the financial hold of your student account is to settle the balance. Some schools offer a payment plan set up through a third party. This allows you to pay your tution an fees each semster in portions rather than the whole balance upfront. Also you can enroll in classes for the semester to continue your degree. Caution is you cannot default from the plan. All payments must be made timely.

My school offers the Academic Management Services (AMS) payment plan. They advised me to enroll in the paymet plan at the beginning of the semester. AMS required a portion payment upfront. Then I made regular payments therafter untill it was paid off by the next semester.

I do not think you can apply this to your past due tution and fees. I believe that has to be settled before you can re-enroll for the next semester :(


Submitted by Cool_Abyss on Sun, 04/19/2009 - 11:51

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this is on an old tuition debt. I dropped out 1 week after the allowed "drop date" when I finally got the news that my student loan wouldnt go through (my fault for procrastination, I applied late) so at the point I owed the university the full amount of that semesters tuition, even though I received no credits for it. I have another question though to add on - this went to collections May of '02, however for the past year has not been reported to the credit bureau. Now it is with a new collection agency - can they report to the credit bureau now? I know there's no SOL for them to collect however do they have to follow the 7 year cbr deragatory reporting rule?

By the way - the original debt is actually paid off now (from past years of having my tax refunds confiscated), I just hadn't paid the collection agency fees. But now they have transferred to a new collection agency?


Submitted by on Tue, 05/19/2009 - 11:35

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I'm in a similiar situation, I owe my undergraduate school a little over $ 5000, I graduated in 07 but I really what to enrolled into grad school. I currently have a descent job but I want to get my masters, I don't have the money to pay them off, what should I do? I need my diploma and transcript.


Submitted by on Mon, 05/25/2009 - 13:18

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My daughter has a student loan in default. Allied is the CA. The original amount was fairly small, about $2600. When she was contacted by Allied the first time we discussed a down payment and agreed to the rehab program. I made the suggested down payment for her and charged it to my credit card. After the charge was executed Allied called and said it was $200 too much in order to qualify for the rehab program citing a $50 minimum monthly payment and a $500 balance at the end of 10 months. I disputed $200 with my credit card company and received a refund but the monthly payments never started (Aug 2008). Allied refuses to acknowledge the $200 reversal and demands the BIF because she doesn't meet the rehab program requirements. We're at a loss for what to do. I would just pay the $800 balance but she wants the rehab program to help her credit report. Any advice?


Submitted by on Wed, 05/27/2009 - 11:55

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SoapLady, Thanks for your response. She never signed the rehab docs or agreed upon a monthly payment because Allied shut down the process when they realized the monthly minimum and balance requirements would not be met until the $200 credit card charge was reversed. They claim it wasn't reversed even though my credit card account was refunded. We're at an impass. Are you familiar with the minimum $50 monthly/$500 balance after 9 monthly payments requirement? This is a legitimate requirement?

I apologize this is getting long but have one more question. Is the credit score benefit of the rehab program versus paying the loan in full sans the rehab program worthwhile enough to keep arguing with Allied?


Submitted by on Wed, 05/27/2009 - 18:07

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It used to be $800-$1000 for a rehab although things might have changed.,

Rehab docs, the official ones are not signed until much later, closer to the completion of the 9 payments.

If the $200 was reversed, it should have charged back. However since it was done on YOUR card and not hers, they may not be able to trace it back to her. Your name is not on file so the accounting department might not know who to debit.
The agency I worked at used to have a "lost and found" file...payments and transfers that came in with no account numbers/names they couldnt trace to an account number.


Submitted by SOAPLADY on Wed, 05/27/2009 - 18:31

SOAPLADY

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I have an unpaid tuition bill of 1,750. It is presently in Collections. Collections is now saying that if I don't pay the balance OR a portion of the balance + monthly payments by TOMORROW, they are sending my file to their legal department. Even if I could raise the portion (which I can't), I wouldn't be able to afford the monthly payments. My plan was to pay it all off with my tax refund, but that's 3-4 months away. What usually happens next - when it goes to the Legal Dept?


Submitted by on Thu, 10/22/2009 - 08:11

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My student loan was 1800. I had to drop do to some medical reasons. For awhile I was not working so got way behind on my payments. My total is 2,946.00 I don't mind paying this for I did borrow it. But now its gone in defult and they are garnishing my wages. But they added another 5,000 to it. How can they do that ??


Submitted by on Wed, 08/25/2010 - 18:51

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My loan was 2946 but the collection agency has added another 5000 the I called the school and they said all I owe them is the2946 and that the collection agency can add whatever they want. That the school has nothing to do with it.


Submitted by on Fri, 08/27/2010 - 07:35

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What type of loan? Perkins? Instituational? So your balance is $5000 or $7946? Keep in mind that with any loan interest is still accruing. The school still owns the debt but they have outsourced it or assigned it for collections. I have heard of fees of 50% being added but what you are saying, no.


Submitted by SOAPLADY on Fri, 08/27/2010 - 07:39

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I have an unpaid tuition balance with a University. I started the semester and dropped midway, (shortly after I was refunded loan money) by doing this, the University returned the student loan money to the loan company. Then, they billed me for the $5000. They have since turned my account over to a collection company that has added $2500. I do not owe the loan company, I owe the University! Can they garnish my tax returns or wages for the unpaid tuition? Also, I was informed that if I send payments to the University, they would in turn keep some and send some to the collection agency. I am wanting to have the CA reduce some of their charges and I would like to deal with the University. What are my options to and what can the collection agency really do besides sue me?


Submitted by on Mon, 02/21/2011 - 19:43

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As with most educational debts, the CA does not add the fees, the school does. You agreed to pay the cost of collections and the school tacks it on to your balance. At this point in time, the school has a contract with the collection agency..usually in these contracts the school agrees that all funds submitted to school will be forwarded to the CA as a pay direct. The school also agrees to keep there hands out of the collection process. Thus you would not have the option of dealing with the school...the are contractly bound to pay the CA, so why would they want to use their resources.

Usually these types of accounts will settle off on a portion of the collection fees if you are making a lump sum payment. THey will not waive fees if you are just making payments.

If this was a public (state) school, they can seize your tax return


Submitted by SOAPLADY on Mon, 02/21/2011 - 19:56

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Is there a time line for instance after 7 years they can't come after you for that bill or since it is state that it can be on forever?? Thanks


Submitted by on Mon, 03/21/2011 - 09:10

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I am in a very similar situation to everyone here:

I owed my school the full tuition ($4400) of fall semester and because I did not pay, my account was sent to a CA. After discussing the matter with them I found out that I have until April 15th to pay the debt or settle on a repayment plan or the matter will be reported. Is it possible to take out some kind of loan to pay the debt back or is my only option to make monthly payments until the debt is settled which would take about a year and money that I don't honestly have. I'm in up to my head and I have no idea what to do. I would really like to be able to enroll back in school but there's obviously no way of doing that until this hold is settled. Please any info would help


Submitted by on Thu, 04/07/2011 - 15:24

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My question is about tuition. I was placed on a veteran's hold at my school until the VA approved and paid for my tuition, and I was also considered not officially registered to the school at any point of time during attendance. Due to school officials not doing their job and turning in paper work and the VA I ended up having to drop out of the school. I am currently being harrassed by a collections company for 12000 dollars, 7000 of that being actual school fees. My student loans were returned and the VA is still deciding on if they are suppose to pay or not. My question is is it legal for them to charge interest on tuition alone?


Submitted by on Thu, 04/14/2011 - 17:05

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No such thing as not officially registered during attendance. Your tuition was put on a hold status...which means you were in fact officially registered. If you were not registered officially, the VA would have said NO a long time ago since you did not qualify as you would not have been in school.

You would be responsible for the cost of collections....that is usually in the student handbook. That can be up to 50% of the balance.


Submitted by SOAPLADY on Thu, 04/14/2011 - 18:26

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I am in a similar situation as well.

I just received a called today (10-25-11) regarding unpaid tuition from Sept 2000. Eleven Years ago!! I never took out a student loan, ever. I attended college on a scholarship. I didn't pass my classes, so my scholarship didn't renew. I couldn't afford college, so I didn't enroll the following semester. I spoke to the college, and they said that they retroactively billed me for the classes since I didn't pass. I have never heard of that practice and I had NO idea I had a balance. Now 11 years later a collection agency is trying to collect.

My question is, is there an SOL of the unpaid tuition. I haven't been able to get a straight answer from anyone. They all say student loans have no SOL, which I understand. However, this is NOT a Student Loan. This is a public school.

Also, if you could point me towards some legal documentation that clearly spells out any exclusions to the SOL, it would be much appreciated.


Submitted by poptart on Thu, 10/27/2011 - 07:42

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I have a couple of questions. I just got a letter in the mail saying that i still owe my university $1800, and i have to pay it in 30 days. Financial aid only covered the pell grant part and did not give me the other loans because i did poor last semester. There is no way that i can come up with $1800 in 30 days. What will happen if I cannot pay it? Is there a way i can get a loan to pay it? Payment plan? Can they keep charging me if i dont pay it?


Submitted by soccer55597 on Wed, 02/01/2012 - 23:40

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Quote:

I have a couple of questions. I just got a letter in the mail saying that i still owe my university $1800, and i have to pay it in 30 days

This is standard. Tuition and fees are due the semester you attend.

Quote:
. Financial aid only covered the pell grant part and did not give me the other loans because i did poor last semester.

This does not make sense....a Pell Grant IS financial aid and if you were on academic probation, you would not have qualified for grants either.

Quote:

There is no way that i can come up with $1800 in 30 days. What will happen if I cannot pay it? Is there a way i can get a loan to pay it? Payment plan? Can they keep charging me if i dont pay it?

Well you cannot register for school until this is paid and your transcripts will be frozen. Also, if this is a state school, they will submit your debt for tax offset.
Read your student handbook for details on late fees and collection fees. When I collected, tuition accounts charged anywhere from 25-50% for collection fees.


Submitted by SOAPLADY on Thu, 02/02/2012 - 07:16

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